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Foreign Policy

Money for ASEAN: Small, Yet Symbolic

May 18, 2022
  • Yuan Ruichen

    Research Assistant, Center for Southeast Asian Studies, Peking University


In 2021, senior American officials visited Southeast Asia, where members of ASEAN countries called on it to make substantive commitments. This year, on May 12, the first day of the ASEAN-U.S. special summit in Washington, the U.S. announced that it would allocate $150 million to ASEAN to strengthen ties. The next day, it promised to upgrade relations to a “comprehensive strategic partnership.”

While the amount of money is modest, the contribution is forward-looking and adaptable. So one can focus on its symbolic significance. The U.S. is expected to launch a larger-scale commitment at the 10th ASEAN-U.S. Summit in November. 

Promoting maritime cooperation 

The U.S. will invest $60 million in maritime projects, focusing on combating illegal fishing and ensuring freedom of navigation. It will send a permanent representative of the U.S. Coast Guard to the office of the U.S. Mission to ASEAN, and deploy a patrol boat in Southeast Asia and Oceania to participate and assist in training. Maritime security cooperation is a substantial measure taken by the U.S. to implement the new Indo-Pacific strategy issued in February.

U.S. President Joe Biden’s use of such expressions as “a sea of peace, stability, and prosperity” and “confidence building,” as well as his references to lowering tensions and reducing the risks of accidents, misunderstandings, and miscalculations, help ease China’s irritations and make it easier to win the support of relevant ASEAN countries. The U.S. hopes to solve its identity problem as a non-South China Sea sovereign voice, ensure long-term involvement in South China Sea matters and strengthen the dependence of key countries on the U.S. 

Addressing climate change 

The U.S. will invest $40 million in clean energy facilities. It hopes to use the multiplier effect of infrastructure investment to draw public and private capital from all sides to flood into the clean energy field in Southeast Asia. It is expected to help raise $2 billion in regional clean energy technologies and transactions. ASEAN countries' national economies are mainly in the growth stage, and the foundation of energy transformation is weak. However, they are facing the severe threat in climate change. This move by the U.S. will set up a forward-looking framework for deepening energy cooperation between the two sides. It may use ASEAN as a model for fulfilling its commitment to providing climate funds to developing countries globally. 

Fighting the pandemic 

The U.S. will invest $10 million in public health projects, including assisting in training medical staff and improving the efficiency of epidemic surveillance and prevention in ASEAN countries. Last year, Thailand, Vietnam, Singapore and other ASEAN countries began adjusting their domestic epidemic prevention and control strategies gradually to “live with the virus.”

Helping the U.S. and ASEAN countries normalize their response to the epidemic situation helps stabilize domestic prices in the U.S. and includes the consideration of reconstructing the global supply chain network. However, American enterprises need to make specific technology transfers to attract ASEAN countries. The U.S. government cannot force companies to do this, nor is it necessarily in the interests of the U.S. 

People-to-people connectivity 

The U.S. will invest more resources in scholarships and educational exchange programs. The Nitze School of Advanced International Studies at Johns Hopkins University in Washington will cooperate with American enterprises to provide opportunities for talent exchanges in ASEAN, including training courses for civil servants in ASEAN countries.

In the past, people-to-people exchanges, especially exchanges of young ASEAN leaders, have always been the highlight of ASEAN-U.S. relations. But with the decline of U.S. regional leadership, related projects have been suspended one by one. The new actions will consolidate the traditional influence of the U.S. on Southeast Asia in the social and cultural fields and confirm what Vice President Kamala Harris said: “As an Indo-Pacific nation, the United States will be present and continue to be engaged in Southeast Asia for generations to come.” 

Which one is overlooked? 

ASEAN leaders, represented by Lee Hsien Loong, are calling on the U.S. to increase its investment in the ASEAN digital economy. ASEAN countries have been closely tracking the development of the domestic political situation in America. They know that it is nearly impossible for the country to make substantial market access commitments in trade and investment; therefore, the digital economy has become the focus of ASEAN's attention. The Indo-Pacific Economic Framework is expected to be announced during Biden’s forthcoming visit to Japan at the end of this month. In the joint vision statement, the U.S. focuses on digital infrastructure and smart cities, laying a critical foundation for future connectivity across the Pacific. More important, on this basis the U.S. will implement its digital standards in Southeast Asia, thus ensuring a sensible division of labor in the digital age.

However, in digital governance, because the development of the digital economy in most ASEAN countries is immature and issues such as intellectual property protection are important parts of the American digital trade rules template, it isn’t easy to promote cooperation. On the issue of cross-border data flows, the U.S. must adopt a step-by-step strategy, first consolidating existing cooperation initiatives with Singapore and gradually extending them to Malaysia, Thailand and other digital economies in the future. This means that it is difficult for the U.S. to cooperate with ASEAN in digital governance, which will inevitably lead to competitive advantages for China’s more inclusive governance scheme.

The next six months will test the investment commitment of the U.S.

ASEAN countries did not directly establish a comprehensive strategic partnership with the U.S. at the summit but planned to upgrade it at the 10th ASEAN-U.S. Summit in November. To become a comprehensive strategic partner of ASEAN, as China did last year, the U.S. must make further practical and concrete commitments. ASEAN will put pressure on the U.S. to increase its investment in mutual relations, especially on clean energy and the pandemic, while at the same time preventing a backward slide and asking ASEAN to choose a side based on supply chains.

Some ASEAN countries have agreed to use the Indo-Pacific Economic Framework as an alternative for the U.S. to return to the TPP. However, as the framework is expected to lack market-opening commitments in trade and investment, attracting other ASEAN countries has become a significant challenge for the U.S.

If it lacks sufficient political determination to expand the actual scale of investment in ASEAN, prospects will dim for establishing a comprehensive strategic partnership, or reaching an empty shell that can be nominally compared with China. It will be useless. The $150 million packages are a good start for America’s regional vision, but what the U.S. does next will be decisive. In Southeast Asia, actions always speak louder than words.

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